Posted 9/13/2012 05:08:00 PM by Douglas

Some headlines are supposed to sound like good news, but you just know that they aren’t. “Rectal probes get 0.2mm smaller!” or “IRS sending out lavender scented audits this fall” all sound like good ideas that just aren’t. Enter the Fed and their shenanigans from today:

Fed unveils bold, open-ended steps to aid economy

FINALLY! After TARP, and the Stimulus, and the Detroit bailout, you would think that the printing presses at the Fed have printed just about all the phony fiat currency that the system can support. Well you’d be wrong:

As part of its bold and open-ended plan, the Fed said it would spend $40 billion a month to buy mortgage bonds to make home buying more affordable. That will be the third round of bond-buying in an effort to spur the economy, and the Fed left open the possibility of taking other steps to encourage borrowing and financial risk-taking.

This has relatively nothing to do with making homes more affordable, but have you ever noticed that when the government tries to make something “affordable” (college tuition, healthcare, homes), that’s when the price goes through the freakin’ roof. Why is that? Anyway. . .

Some economists suggested that the Fed might continue to buy $40 billion a month in mortgage bonds for up to three years. That’s how long some expect it will take for the unemployment rate to dip below 7 percent, toward a ‘‘normal’’ rate of 6 percent or less.

If the new bond buying lasts three years, Ashworth said it would add about $1.4 trillion to the Fed’s purchases. That would be close to the $1.7 trillion the Fed spent in its first round of bond buying, which began in November 2008 and ran until March 2010.

The Fed’s second bond-buying program totaled $600 billion. It ran from November 2010 through June 2011.

OK, Fed, last chance. I know you think there is a magical amount of gasoline you can pour on that fire to put it out. Every time you think that you’ve got the right amount, but every time you’re wrong, and you need more Keynesian gasoline to put out the fire. Maybe this time will do it. Thankfully, no one in America is paying attention. Otherwise, there’d be blood in the streets.